PennEast gas pipeline in a tailspin of delay and uncertainty

Source: ReThink Energy NJ

PennEast's proposed gas pipeline project in NJ and PA is considerably delayed in gaining necessary approvals from the FERC and state agencies, affected by widespread opposition by legislators, regulatory agencies and the public.

According to ReThink Energy NJ, PennEast's proposed pipeline project in NJ and PA is considerably delayed in gaining necessary approvals from the Federal Energy Regulatory Commission (FERC) and state agencies, affected by the trend of beleaguered gas pipeline projects throughout the U.S., and widespread, growing opposition by legislators, regulatory agencies and the public.

FERC recently announced a schedule that delays its review of the project by as much as a year. In a press release on April 4, 2016, PennEast acknowledged the delay, stating: "Based on a preliminary review, PennEast anticipates an in-service date in the second half of 2018 rather than late 2017."

FERC continues to request missing information from PennEast needed to complete the Draft Environmental Impact Statement (DEIS). FERC's most recent request made on June 3rd highlights missing alternatives analyses and surveys of critical wildlife habitats.

"Highly relevant to PennEast's problem-ridden application is the fact that multiple natural gas infrastructure projects have faced unprecedented regulatory problems in recent months," said Tom Gilbert, campaign director, ReThink Energy NJ and New Jersey Conservation Foundation. "We believe these issues signal a change in the regulatory fabric of the natural gas industry, which will impact the PennEast project."

Recent examples of delayed and halted gas pipeline projects include:

  • Jordan Cove LNG export terminal and associated gas pipeline was rejected by FERC in March.
  • In April, Kinder Morgan withdrew their Northeast Energy Direct (NED) pipeline application with FERC due to opposition and insufficient demand.
  • Also in April, the New York State Department of Environmental Conservation (NYSDEC) denied the 401 Water Quality Certification for the proposed Constitution Pipeline because the pipeline would violate the water quality standards required by the federal Clean Water Act.
  • NJ Department of Environmental Protection (NJDEP) review of the final section of the Transco Leidy Line is significantly delayed due to pending litigation over impacts to streams and wetlands and an outstanding contested permit.

PennEast's proposed pipeline faces significant regulatory uncertainty, for example:

  • In a November 2015 letter to FERC, NJDEP stated that it would not accept an incomplete application and that the timeline included in PennEast's application to FERC "does not appear to be attainable." With NJ landowners denying access to more than 70% of the land along the proposed route, the company cannot complete its NJDEP application without exercising eminent domain. Even if PennEast is granted eminent domain power, the earliest it could start collecting the missing survey data is March 2017.
  • In an April letter to PennEast, the PA Department of Environmental Protection indicated that PennEast's permit applications are "incomplete", citing a host of missing information. They gave PennEast until June 25 to provide the information or the application would be considered withdrawn.
  • In April, the Delaware River Basin Commission (DRBC) stated it will hold independent hearings on PennEast in 2017, posing an additional hurdle for PennEast.

"PennEast is facing enormous opposition and is under intense scrutiny by regulatory agencies and the public," Gilbert said. "The problems they've encountered thus far indicate that PennEast could be the next pipeline to go down."

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